Federal excise duty on Canadian beer gets lower rates for small brewers and a continued 2% annual inflation cap

Plain-language summary · AI-assisted · not legal advice

Two sets of changes have been made to the federal Excise Act affecting beer duty. First, the preferential reduced-duty schedule for Canadian brewers has been restructured: the first 2,000 hectolitres now attract a duty rate of 5% of the standard rate (down from 10%), the next 3,000 hectolitres stay at 10% (renumbered from tier 1), the next 10,000 hectolitres stay at 20% (renumbered from tier 2), and the previous 40% tier covering that same 10,000-hectolitre band has been removed entirely—meaning small and mid-sized domestic brewers will pay less duty on those production volumes. Second, the automatic annual inflation adjustment to excise duty rates is capped at a maximum increase of 2% for both 2026 (fixed at 1.02) and 2027 (capped at 1.02 if CPI would otherwise push it higher), continuing the same approach used for 2024 and 2025. Separate amendments not yet in force will make further changes to the schedule starting April 1, 2028. Brewers should review their duty calculations against the revised tiered schedule to confirm they are applying the correct rate for each production band.

Who this affects: Canadian beer brewers · small and craft breweries · excise duty compliance teams · beer importers and distributors